EDITORIAL: Inflation in Canada retains on climbing

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Those are records you don’t want to break. And yet here we are.

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Statistics Canada’s latest inflation figures are out and the figure is once again higher than a month ago and shows no sign of calming down.

The agency said the consumer price index for May rose 7.7% year-on-year.

This is the highest since January 1983, when it rose 8.2%. We are now at a nearly 40 year high.

The cost of groceries is up 9.7% year-on-year, with some specific commodities exceeding that number.

It’s a worrying trend. Even more worryingly, those responsible don’t seem to really know what they’re doing.

Last October, Bank of Canada Governor Tiff Macklem said things were under control. His office released an update this month forecasting 3.4% inflation for 2021 and 2022.

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Oops. So much for that.

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“We’re going to keep inflation under control,” Macklem said on CTV at the time. “We know what our job is. Our job is to ensure that the increases we are seeing in globally traded prices today do not lead to generalized and persistent inflation in Canada.”

That’s another oops. Because the issue isn’t so much whether inflation will be tamed as whether it will continue to rise in the coming months, Macklem doesn’t fare too well at his job by his own criteria.

It’s not as if Prime Minister Justin Trudeau’s liberal federal government is doing any better. Treasury Secretary and Deputy Prime Minister Chrystia Freeland says they plan to spend, spend, spend to give money to Canadians struggling with affordability issues. That would add up to $8.9 billion in cash being sent out the door.

Big problem. All that free money Trudeau throws around is thought to be helping the prices go up.

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A new report by Scotiabank chief economist Jean-Francois Perrault says government spending cuts will help dampen rampant inflation. Perrault explains that the current liberal spending plan is driving demand, which is making inflation worse.

Trudeau and Freeland should take his advice.